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Microfinance institutions in Kerala have sought exemption from the provisions of the Money Lenders Act.
The Kerala Association of MFIs (Kamfi) made the request to the state minister for rural development, Mr K. C. Joseph, here on Friday.
BANK FINANCE
Mr K. Paul Thomas, chairman, Kamfi, made the appeal at a one-day workshop on ‘Achieving inclusive growth – Role of MFIs.'
He suggested that MFIs be granted exemption from the act as was in the case of nidhi companies and cooperatives.
Kamfi had 17 MFIs based in the state as members, Mr Thomas said. Almost 10 lakh have been enrolled into the network of MFIs.
According to him, MFIs in the state are finding it difficult to get bank finance since they are not exempted from the purview of the Money Lenders Act.
They are being forced to pay interest rates of as high as 16 per cent, and were constrained by operating expenses of 12 to 14 per cent.
SWAVALAMBAN SCHEME
Mr Thomas also requested the State government to devise a scheme to set apart a share of assistance to each account enrolled under the Swavalamban scheme.
Kamfi has been able to enrol 50,000 accounts under the scheme, a co-contributory pension scheme for workers in the unorganised sector.
The Union government contributes a sum of Rs 1,000 to each eligible subscriber who contributes a minimum of Rs 1,000 and maximum Rs 12,000 per annum under this.
Mr Thomas cited the case of a few states which have launched their own co-contributory scheme for some specified occupational groups.
A prescribed sum will be contributed by these State governments to the accounts of eligible subscribers of the respective State.
This is over and above the contribution of the Union government and the individual subscribers. Such a scheme could be a model for Kerala also, he said.
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